UW Möbius - 6.1 Consumption Choices
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But, some goods or services, like pollution (or cantaloupe, ugh!), can have a negative marginal utility value that will lower total utility.
All goods and services that people value will have a positive marginal utility
Marginal utility from a good is the change in total utility that results from a unit-increase in the quantity of the good consumed.
As the quantity consumed of a good increases, the marginal utility from it decreases.
diminishing marginal utility.
The second thing of note is that the marginal utility is reduced or diminished as the quantity of the good consumed increases.
So, marginal utility is positive, but diminishing as more of a good or service is being consumed.
After the peak is reached, total utility will start to decline as we consume more of the good (i.e. marginal utility turns negative).
Total utility actually peaks when marginal utility equals zero.
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